Hello everyone and welcome to FinTech TV.
My name is Dalia D'Agostino and I'm pleased to welcome Carey Halio, Global Treasurer at Goldman Sachs.
Thank you for joining me.
Sure, thanks for having me.
A few years back, I started a YouTube channel dedicated to teaching financial literacy to kids.
Now I'm working with Fintech to interview inspiring business leaders to hear their views on money and advice for kids starting their financial journey.
Let's begin.
You're the CEO of Goldman Sachs Bank USA, which offers saving products to regular people, not just big companies.
If you were designing a simple savings or banking product specifically for kids and teens, what features you include to help us build smart money habits early?
Well, thanks for having me today, Dalia.
It's really fun to, to talk to you about all of these concepts.
So at Goldman Sachs, we have lots of different types of clients.
We have institutional clients, corporate clients, and individuals, as you mentioned.
And, uh, and we basically offer services to help clients think about managing their money, whether they're investing, they're saving, or they're managing the money in some way, investing in some way.
And so it's the same for kids.
You want to think about your earnings, and for kids that would be maybe an allowance.
For companies, it would be your revenues for A large, uh, you know, for a grown-up, it's probably your paycheck.
So what money do you have coming in and then what do you want to do with that money?
How much are you going to spend?
How much are you going to save?
How much are you going to invest?
And so these concepts are, they're, they're the concepts for adults, they're the concepts for, for corporations, and they're the same concepts for kids.
And so I think.
If we were thinking about these products for kids specifically, you would want to just think about those major building blocks, right?
What are your earnings coming in?
So, what is your allowance or birthday money you might receive from a grandparent or something like that.
And then what are you going to do with that money?
Are you going to save it?
Are you going to spend it?
Are you going to invest it?
Those are the basic things.
I think there's lots of different companies, lots of different banks in particular, that have these types of products for kids already, and I think a bunch of them are great, and I would encourage kids to.
Interact with them, sort of, you know, try different things.
Um, your career has focused a lot on understanding and managing financial risk for large institutions.
How can middle school students apply some of the same risk management ideas like diversification or plentifully unexpected to basic things like allowance, birthday money, or a first small job?
Well, risk management is a really important concept to learn early, and I think, you know, I, I think about that every day in my job.
Um, and there are lots of times when you have to think about risk management through different types of periods, right?
And so we happen to be, uh, in a very prosperous economic environment right now, but it isn't always the case.
And so one of the things I think it's really important to think about as, as kids is what, what could happen to my money?
What am I going to do with my money?
What could happen to it if there's a downturn, because you are taking risk in some way.
And so there's lots of different types of products and services out there to help kids invest their money, and some of them are changing.
This is the same, the same is true for adults and for corporations as well.
Like some of the things are changing.
There's lots of innovations going on, and that's exciting, and the world will continue to innovate.
But, but as an investor, which you are, like everybody else, you have to think about.
What could happen to my money during a downturn.
And so, you know, I work for a large bank and we're heavily regulated and lots of the regulations exist to protect consumers.
And so your money with a bank is very protected in a downturn, and you have to always be thinking about, well, what could happen.
No matter where I put my money, what could happen to that in a downturn?
You can keep it under your mattress.
It's nice and safe there, but you probably won't earn any, any yield on that, and you want it to grow over time.
And so you have to invest it in some way, but all investments involve some sort of risk.
You want to make sure you understand the risk that you're taking, and diversification is certainly a really important component to that.
You don't want to put all of your money in one place unless you know that it's kind of locked up and rock solid.
Yeah, I was in elementary school and I did a fake stop.
I, I got.
Fake $50,000 that I would invest in stocks and I would track how that money would go and it really taught me how there's risks and you have to, you have to kind of learn where you want to put your money, split it up evenly.
Right, right, and you can split it up evenly between some savings, right, where it's just gonna be, you know, it's just gonna sit there and earn some, some yield for you, and then you can invest it in stocks or in bonds.
Or in other types of investments.
And so it is important to sort of spread it out.
If you put it all on one stock and you happen to be wrong, then you could, you could lose, you know, probably not all of your money, but you could lose a lot of your money.
And so there's different risk profiles with the different types of investments, and you want to sort of spread it out over that.
But I do really think that it's important to think about this, this like what could happen if something goes wrong scenario and not just think about the scenario if things go right.
And it's very important.
Um, as global treasurer, you help oversee how Goldman Sachs manages its liquidity and capital, which affects how money flows through the whole firm.
What do you think families and schools should be should be doing differently to make your children understand how banks actually work and how that relates to the safety of their savings?
Yeah, I mean, families and schools could be doing a lot to teach kids, you know, I have, I have two kids.
I have a middle schooler like you, and I have a high schooler.
One of the things that my high schooler just did that I thought was really great is he took a financial literacy class, which, which, which taught them a lot of different things.
They, they, they also visited the New York Stock Exchange here as part of that process.
But one of the things that they learned that was the most important lesson for him, and it was clear to me the thing that he learned the most during that period was a basic budget.
And so what they did is they had all of the kids think about themselves, you know, a year or two out of college.
So they were, they were working, they were independently, um, thinking about money, and they had to think about what their earnings would be, what taxes they would need to be paying, and then what was their spending each month, you know, how much were they paying in rent, and what are their phone costs, and what are their food costs.
And all of these sorts of basic necessities.
And then also, were they investing for the future, or were they saving for a rainy day?
And I found that my son learned a ton from that, because as kids, you don't necessarily have to think about those basic necessities.
They're typically provided for you by your family, but If you fast forward several years and think about these basic concepts, it's kind of what I said at the beginning, you know, you have your, your earnings, your income, whether it's your paycheck or your allowance or your revenues, if you're a corporation, you have your spending, and then you have what you're going to save or invest.
And so these basic concepts really last through your lifetime, no matter who you are and what sort of organization you're representing.
And so this is just something, it's just, it was a simple concept for kids at high at the high school level, but He really learned a lot from it.
And he learned, he said to me, Wow, Mom, do you realize, like, it's, if you, if you took a taxi to work every day, that's going to be, you know, hundreds of dollars a month.
And I was like, Right, you have to really think about that.
And so when you force yourself to think, to sit down and think through these different components, right?
Your earnings, your spending, and then your savings, You can really start to think about the different pieces and uh it's not just about investing in a stock, but it's the whole picture, it all comes together.
I, I think it's very important to learn how to budget and invest correctly.
I know when I was little and I would get birthday money allowance, it's, it was hard for me to imagine why I should invest it and budget it instead of spending it and.
It was hard for me to imagine far into the future where I would need it, and over time my dad has shown me how the money has grown by investing most of it and still leaving some to spend, but investing most of it, it grows bigger and bigger and it's very important.
That's a great lesson.
One of the things that I think about, I see this in my own kids, is that.
Money can be very abstract for a child.
Not only are you not responsible for the earnings of the family and then the basic necessities, but also it's, it's often, and this was the case when I was a kid, but it's even more the case now that you're, you're interacting with the money electronically, right?
You might be getting a, a, you know, a Venmo payment or something like that, and you're, and or it's sitting in a bank account or it's sitting in an investment account, and you don't, you don't.
Feel the money.
You don't see like, oh, I spent $5 and now I have $5 less in my pocket.
It's just, it's an electronic thing, so it can be very abstract for kids.
I think that's one of the things that I think is really important to learn early on is that it's very real.
And I think when you go back to this basic concept of earnings, spending, and saving, then you, you realize, oh, I have to, I have to earn enough to be able to spend those things.
But sometimes for kids, like, if you have a credit card of your parents or you have money on your phone, you just think like it's not real.
And, and some of the things that kids spend money on, like video games, is, um, speaking for my own family, um, is actually like super abstract, because you're not even really getting anything physically in return for spending that money.
And so I think it can feel very much like, like play money and not real.
And so understanding that the real world, uh, use cases and like the fact that you have to earn enough to have that spending going on is, is super important.
Well, you started in credit risk, became a partner, then CEO of Goldman Sachs Bank USA, then head of investor relations and chief strategy officer, and now serves as a global treasurer and a member of the management committee.
Looking back, what money lessons do you wish you had learned at 13 that would have made your path in finance easier, and how can kids my age start learning those lessons now?
I think that, you know, I didn't, I wasn't very involved with the thinking about the budget in my family growing up, although my dad taught us some really good lessons around thinking about if you wanted to buy some new clothes or new, new sneakers to save up for them, and they would, they would really think about a clothing allowance.
My parents would think about a clothing allowance for us, and I think that was a good lesson early on.
I'd say though, if I like zoom out from money lessons, if I think about what kids your age should be focused on and thinking about, you should understand money, and that's important to do.
But the, the, the most important thing that you should be doing at this age is thinking about exposing yourself to different experiences and learning everything you can about the things that you're doing in the world.
I, I just think that's like the number one thing that kids should focus on is like interacting with people.
People learning in every environment and exposing themselves to new things, different things, new environments and new places and so forth.
I think you learn so much from that.
I mean, I've been at Goldman Sachs for almost 26 years now, and, uh, which is crazy.
Um, but I think that every day I go in and I, I learn new things, and it's very motivating to me.
And I think as kids, you just want to make sure you're soaking everything up as you, as you go.
I agree.
Um.
Your time in the Peace Corps in Guatemala influenced how you think about resilience and how women often reinvent their families and communities.
How has that experience shaped your views on financial education for children and what can big financial institutions do to support money skills for kids in under-resourced.
Yeah, the Peace Corps was an amazing experience.
I really learned a ton from that.
You mentioned resilience.
Um, that was a big, a big component of it.
It was the first time I was on my own, living in the world.
I was away from my family and I didn't have all of the sort of usual, um, Comforts of home.
I didn't have a car, I didn't have a phone, I didn't have a computer or a television.
Um, and so it was really, you know, kind of stripped down, um, and up to me to sort of find my path and so forth.
The, uh, I worked with groups of women on a microfinance project there, and as you mentioned, the women were kind of the center of their families and thinking about, um, their, their, uh, their, They were thinking about their families first and foremost, but they also had to make money to contribute to the family.
And so they were very creative in coming up with different projects that they would do.
It wasn't like they left the home and went to the office.
Most of the women I worked with had sort of second grade educations, but they really did think about the economic contribution to their, to their household.
And because we were doing microlending, you know, some of the concepts I was teaching then. are really again these basic ones, right?
They were getting a loan.
They had to pay back that loan at the end of a certain amount of time, and I was encouraging them to think about how much are you paying in interest?
What are you earning, um, on top of that, is that enough to cover the interest payments?
And these were, again, like these basic ideas of, of earning, spending and saving, but it was in a totally different context.
And I really think that, again, these are universal concepts that, that aren't that complicated to understand at the basic level.
But really apply kind of everywhere we look.
Yeah, I, one of the reasons I started the YouTube channel is because I agree that everybody deserves a financial education, no matter their financial status or the financial status of their family.
Yes, I agree with you, and there are a ton of tools out there, free tools from.
Different organizations and even this, you know, the Federal Reserve has a bunch of tools that are available to kids, and I think it's really important to understand these basic ideas because money, it matters quite a lot to, to people's sort of, you know, sort of financial stability and ability to support their, their families.
Um, I wanted to ask you, um, your opinion on a survey that I did.
I surveyed over 100 adults and kids about how they communicate about money.
And something I found very interesting was that 90% of adults think that they communicate clearly money concepts to their kids, while 60% of kids say that they don't understand what their parents are talking about.
So that sounds like it could be almost on any topic between kids and adults.
So you wanna know what I think?
Yeah, well.
I, I'm sure that that's true, that the parents think they're communicating clearly and the kids think that they're, they're not communicating clearly.
Um, I think that's probably very true, and I suspect that, um, that if the parents broke it down as sort of simple concepts, um, the kids would understand it better.
But also, you know, you're kids and you don't have to be financial wizards.
You don't have to be deeply involved in.
The financial aspects of your family, I think it's important to understand the basic concepts and the, you know, sometimes kids ask for things and the parents say, Well, we can't afford that and we don't have money for that, and You know, kids will say, Well, what do you mean it's only $10?
But like really you have to prioritize, and I think for kids to understand some of the basic concepts is really important, but they don't necessarily have to be super involved.
So maybe there's just a bit of a of a disconnect there between the expectations on both sides.
Yeah, I also remember you said something.
You said stuff about how money doesn't really seem that real when it's online.
And a connection I made was maybe that kids, they're most of them are visual learners, so when adults are explaining money concepts, it can get really complicated when they're not able to see this money concepts in front of them.
Yeah, no, that's a great idea.
I think that's right, and you can illustrate it with some.
Basic ideas of again the money coming in, the money being spent, and the money being saved or invested, and like there's just these three buckets, right?
I do think that you could illustrate that quite nicely.
I bet you have a bunch of creative ideas you can offer them to your, to your viewers.
Something I actually do on my YouTube channel is in in pretty much all of them.
I make up a And an example of the topic, for example, in my son class video where I pretended that.
It's like going to a water park when it's raining or an amusement park when it's raining and you're not really getting the most out of it, but you still wanna go to save money I like because you've already paid for it, yeah, so I like using one visual representation that's great, yeah, I think that's the end of my questions. um thank you so much and have a great day.
Thank you.
Thank you for having me.
